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Wrapped & Ready to Go

7 Oct, 2013 By: John Latchem, Chris Tribbey

'The Wizard of Oz: 75th Anniversary Edition'

Fourth-quarter titles are readied for release in the all-important gift-giving season

It’s the most important time of the year for home entertainment. And boy is it crowded.

Surveying the potential landscape of fourth-quarter home entertainment titles, DreamWorks Animation CEO Jeffrey Katzenberg said he in July wasn’t worried about how theatrical underperformer Turbo would fare on disc.

Katzenberg at the time declared there was “very little competing” during the date targeted for the film, and that “Turbo will be profitable for us.”

The street date (Nov. 12) they announced for Turbo, it turns out, is the same day as Warner’s Man of Steel, which out-grossed it by about $290 million domestically.

Such is the way things go in the fourth quarter, as studios jostle the release dates of big summer blockbusters to take advantage of holiday shopping seasons.

“On the new-release side, these conversations about the fourth quarter have been going on for at least six months, about selecting dates and spacing them out, so they’re not on top of each other,” said Jeff Baker, EVP and GM of theatrical catalog for Warner Bros. Home Entertainment.

The fourth quarter for 2013 is seeing various release strategies from the studios. Warner and Disney are spreading out their new releases, while Sony, Fox, and Universal are clustering many titles around the same time.

Sony has White House Down and Grown Ups 2 on Nov. 5. Fox has The Heat Oct. 15, followed Oct. 22 by The Internship and The Way, Way Back, then has Turbo and Paranoia Nov. 12 and Nov. 19, respectively. Smurfs 2 (Dec. 3) is also on Sony’s slate. Universal Nov. 19 has The World’s End and 2 Guns, followed a week later by Jobs Nov. 26. On Dec. 10, Universal will street Fast & Furious 6 and Despicable Me 2.

Disney’s release of the box office disappointment The Lone Ranger Dec. 17 will see a little competition from Sony’s Elysium and One Direction: This Is Us, both out the same day.

On the other hand, Warner in previous years released the first two “Hangover” films in December. This year, it’s putting the underwhelming The Hangover Part III out Oct. 8. It could dominate the slot against the likes of After Earth and The Purge.

There are still a handful of major new-release titles without a street date so far, with December most likely for all of them.

“Historically the fourth quarter has always been the strongest commercial period for the home entertainment business since it represents between 35% to 40% of the entire year’s revenue,” said Lexine Wong, senior EVP of worldwide marketing at Sony Pictures Home Entertainment.

“Of course, it’s also a balancing act as to when to release a title — not too early and not too late. One of the challenges will be trying to cut through all of that holiday ‘noise’ created by others who are also trying to raise awareness for their products.”

And while it may be only one target for the studios during the holiday season, the results of Black Friday weekend will say a lot about how this year will turn out.

“If you include Black Friday, those last five, six weeks of the year typically account for nearly 30% of all DVD sales for the year, so obviously it’s a very important time period,” said Anne Parducci, EVP of marketing and family entertainment at Lionsgate.

Black Friday

Hilary Hoffman, EVP of marketing for Universal Studios Home Entertainment, said that while December is a perfect month for disc due to impulse purchasing, gift giving and marketing opportunities, Black Friday weekend is just as important.

“For retail, it remains a vital vehicle to drive store traffic and engage the multitude of value shoppers in search of deals on [one of] the biggest shopping day[s] of the year,” she said. “Blu-ray and DVD continue to be an integral part of that shopping experience and the volume of sales that result continue to be a considerable boost to our bottom line.”

Vincent Marcais, EVP of worldwide brand marketing for 20th Century Fox Home Entertainment, concedes the importance of Black Friday, but “it is only day one of a key part of the year.”

“We are constantly looking for ways to break through the clutter, to address the consumers’ interests and to make what can be an overwhelming time of year a little easier to get through,” he said. “It’s also a great opportunity to target consumers that are not regular film and TV series buyers.”

Sony’s Wong pointed out that people are primed to begin purchasing come Black Friday, and the studios can get a good indication on sales trends out of just those three days.

Catalog DVDs for a few bucks, catalog Blu-rays priced at less than $8, and retailer discounts on the SRPs for new-release titles could make this the best holiday season for home entertainment in a very long time.

“This Black Friday will have the biggest [home entertainment] sell-off in the history of Black Friday,” Warner’s Baker said. “The values for consumers, both standard definition and Blu-ray, are absolutely unprecedented.”

Every Month Is Important

While the end of the year is important, the fourth-quarter months leading up to it aren’t slouches either.

“The entire Q4 season lends itself for great opportunities to capture the attention of shoppers,” Fox’s Marcais said. “Of course, we look at each of our titles on an individual basis to determine the best date that suites each project.”

Halloween is still a good benchmark for horror-themed releases, with Warner putting The Conjuring out Oct. 22, and Oct. 29 seeing Disney’s Monsters University and Universal’s R.I.P.D.

Paramount avoided the end-of-year logjam, getting a jump on things by releasing its major titles in September: Star Trek Into Darkness and World War Z. Last year Paramount’s major title was Madagascar 3, released in mid-October.

Disney released Iron Man 3 at the end of September (the same strategy it used last year with The Avengers) and had a big catalog release with The Little Mermaid Blu-ray Oct. 1.

“The tendency has been historically, a lot of producers and copyright holders have encouraged the studios to release their product in the fourth quarter, because of course, it’s holiday time, gift giving, and people tend to dig into their pockets more liberally,” Warner’s Baker said.

It’s not just December that’s important — though that last month may be the most important.

“December is great since the pressure is on to buy holiday gifts,” Wong said. “Many people are procrastinators, and they do wait until they are really forced to purchase. That’s why digital distribution provides consumers a convenient and immediate opportunity to quickly purchase and send home entertainment content off as gifts. Additionally, digital extends the gifting season since these entertainment products can be sent immediately, making them great options for last-minute gift givers.”

Gift Sets Galore

It’s not just new releases that the studios are counting on these months. Just ask Warner.

“This is a dream line-up for Warner Bros. for the fourth quarter, possibly the best ever,” Baker said of catalog, pointing to the Friday the 13th: The Complete Collection Blu-ray (Sept. 13), The Dark Knight Trilogy: Ultimate Collector’s Edition (Sept. 24), The Wizard of Oz: 75th Anniversary Edition (Oct. 1), JFK: 50 Year Commemorative Ultimate Collector’s Edition (Nov. 12), James Dean Ultimate Collector’s Edition (Nov. 5), Argo: The Declassified Extended Edition (Dec. 3) and The Hobbit: An Unexpected Journey Extended Edition (Nov. 5).

Sony has its epic Breaking Bad: The Complete Series streeting Nov. 26, Fox has X-Men: The Adamantium Collection Limited Collector’s Edition timed to the Dec. 3 debut of The Wolverine (and also has the Predator 3D Blu-ray in limited edition Predator head packaging in the pipeline).

“There is clearly a market for gift sets, although the market can be limited and the production costs can be high,” Wong said. “If the title is important and lends itself to collector’s items and premiums like books, posters and plush toys, then it makes sense.

Retailer Perspective

Disc isn’t doing as bad as some think, retailers said, and how disc performs during the fourth quarter will be just as important for the likes of Walmart and Target.

“At Target, DVDs continue to be popular with our guests, and we keep a constant pulse on the industry to ensure we offer the ultimate selection of movies and exclusive content at a great value,” said Target spokeswoman Erica Julkowski. She said the retailer is looking at Despicable Me 2, Monsters University, Iron Man 3, Star Trek Into Darkness and Man of Steel as the season’s top sellers.

Target movie buyers can expect to see “great value” on new releases from Black Friday through the end of the year, she said.

Best Buy's Shalla Kierzek pointed to Monsters University, The Wolverine, Despicable Me 2 and Fast and Furious 6 — along with several studio gift sets — as important for the retailer’s fourth quarter performance.

“Black Friday is a huge shopping day for consumers and our goal is to offer great deals in all categories – that includes DVD and Blu-ray movies,” she said. “Movies continue to make a great holiday gift item for all ages, and Best Buy offers the best in new release titles and beyond. In addition to what we carry in stores, we have an extensive catalog of titles on BestBuy.com.”

She added that the gift sets the studios are putting out there do equal higher sales and more consumer interest. “Everyone likes to get a little something extra with their purchase whether it’s unique packaging, a collectible, a free digital copy of the movie or access to exclusive digital content, like what we offered with our Star Trek Into Darkness promo earlier this fall,” she said.

Trans World Entertainment, which operates the f.y.e. home entertainment retail chain, in addition to Second Spin used stores and related websites, said it expects to generates slightly higher sales in the fourth quarter due in large part to Best Buy downsizing shelf space for packaged media.

“Given the competitive changes occurring in our industry, we are positioning ourselves to capitalize on retail opportunities in core categories of music and home video [through the end of the year],” CEO Robert Higgins said in the company’s most recent fiscal call. “In addition, we will continue to aggressively … drive sales by investment opportunities in new and existing [f.y.e.] stores, as well as investments in growth categories.”

Despite the pending launches of new video game systems from Sony (PS4) and Microsoft (Xbox One), Mike Manske, SVP of merchandising, said he doesn’t expect to see the same uptick in console sales comparative with console launches from a few years ago.

“We will continue to manage [games] as a growth opportunity, but you might [also] be aware that [games] is not in all stores … roughly in one third of our chain today,” Manske said. “We’re looking for growth beyond the hardware, how we drive our used business, and leverage our position in buy backs.”

Higgins reiterated that Trans World could open more stores for the fourth quarter, “but it’s very few.”

“I think we as an industry are going to have a great fourth quarter,” surmised Warner’s Baker. “The idea that ownership is on the wane, that people aren’t collecting any more, this is nonsense. The business is very solid.”

Erik Gruenwedel contributed to this report.

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